[pgeorgi]

In the scheme you propose there's also no single entity that defines the pricing at any time, so the nature of the drivers work changes (for example: they can set up their own price structure).

Unfortunately algorithms and implementations for truly decentralized auctions (for the pricing) and trust models (for the feedback mechanism) and actually transferring the money without resorting to cash-in-hand (which, for some reason, seems to be highly unpopular in the US) are hard and by design less profitable than setting up a central instance that controls everything for a fee (eg 20% of revenue).

You're right that under such a system, every driver would be self-employed with as many benefits as they pay for themselves. Uber isn't that system.